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Stock Opinions by David Baskin

COMMENT
Market outlook. The market is at record highs but not every stock is at record highs. Also, earnings are at record highs. You must screen and look for value. Canadian banking industry is doing well and thinks it is not yet over priced. Dividends will also be going up.
Unknown
COMMENT
US Tech. Owners and believers of the FAANG stocks. The notion of winner takes all in tech is something he believes in. Revenue and profit growth of big tech is from stealing market shares from competitors and other sectors. These companies have enormous wealth and tech capabilities. They are dominating the world in a way we have never seen. Disruptors may arise from Asia or other companies we have not heard of. However, we should not bet again big tech.
Unknown
COMMENT
You will get shares in the newly merged Discover-Warner company. The tax treatment is still unknown for Canadian holders of AT&T. For American investors, it is tax free. As a result of the transaction, the AT&T dividend is probably going to be cut in half. There is an argument that it will stop being a yield stock and become a hybrid. The stock is down as a result.
Telecommunications
WAIT
Many are swamped with supply chain blockages. They have positioned themselves well for the electric car business. It is a supplier to every major NA and European car manufacturer. It is well placed. That being said, the stock has gone up a lot. Not sure it is a great buying place. Wait for the frenzy of reopening to abate before buying.
Automotive
BUY
One of the great companies in the world. Unbelievable ability to grow earnings and revenues in spite of being big. Because it has kept the growth rate up, it is not terribly expensive at these prices. Reasonably priced for growth. 28% ROE. 30x PE, it looks expensive but the other metrics makes it reasonable. Still buying for new clients. Would like to see a dividend.
Business Services
COMMENT
Bank loss provisions. Banks make provisions for loan losses and then makes revisions based on actual loan losses. You can look into the financials to see the actual loan losses. However, provisions are forward looking and actual loan losses is backwards looking.
Unknown
SELL
The parent company is saying that the market is wrong about the outlook on properties and they will take it private. It was originally a spinout too. Would sell it if owned since there is no more juice in it.
REAL ESTATE
DON'T BUY
It is trading at around 34x earnings. It hasn't done much in the last year. It is where it was last year, maybe 10% up. Compared to the rest of the market, it hasn't moved. Big pharma was out of favour a couple years ago. This has now come back into favour. It is fully valued now. Has had a wonderful run. A little expensive.
biotechnology / pharmaceutical
PAST TOP PICK
(A Top Pick Jul 28/20, Up 74%) Arguably the best bank in the world with global reach. Hitting on all cylinders right now. Not terribly expensive.
Financial Services
PAST TOP PICK

(A Top Pick Jul 28/20, Up 35%) A juggernaut. Analysts have systematically underestimated how much money it will make from the carried interest of their managed partnerships. Brookfield estimated the value of its stock at 23% more than current market value in their last letter to investors. Biggest Canadian stock holding.

management / diversified
PAST TOP PICK
(A Top Pick Jul 28/20, Up 7%) Has fallen out of favour, but he is not sure why. One of the worst performers for 2021 for his fund, but still a believer in the company.
electrical utilities
BUY

A boring company. It raises dividends every year with a yield at 3.25%. Doesn't go up that much. Could get a return of 6-7% which is tax preferred, it could be a good fixed income substitute. Fortis and Emera are good for steady earners. Yield will keep going up.

electrical utilities
DON'T BUY
One of the so called meme stocks. It has been a wild up and down ride. The price action has nothing to do with the company's prospects. It is a shadow of the business it used to be. It is not profitable. Wouldn't touch it.
electrical / electronic
BUY

Ford is valued at 1/10 the value of Tesla despite making much more cars. It's earnings are also much higher. It is at 16x earnings instead of Tesla at 500x earnings. All of the NA and European makers will flood the market with electric vehicles. It is hard to know who the winners are. A good bet.

Automotive
BUY
A great company with irreplaceable assets. Has been successful in transitioning of the global payment system. It has fingers on a huge stream of daily payments. When the economy will reopen, the stock should benefit from earnings and revenues. Not a cheap stock at about 50x earnings and is not growing at a pace that fully justifies it. Dividend is small. The asset is irreplaceable and cannot be duplicated. A big moat.
other services
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